After more than a year without an audience at Colusa City Hall due to the COVID-19 pandemic, the public returned last week for a special in-person city council workshop to adopt a proposed budget for 2021-22.
As with all but one budget in the last 10 years, Colusa officials said the city will start the year with a projected deficit, based on conservative estimates on the revenue.
The city proposed about $4.5 million in spending from the general fund, about half of which will be spent on public safety, said Finance Director Ishrat Aziz-Khan.
The city has estimated $4.2 million in general fund revenue, leaving a shortfall of about $251,000 plus the $36,000 approved last week to add extra help in the fire department.
The general fund budget authorizes $1.5 million in police services, $824,000 in fire services; $740,000 public works and parks; and $512,000 for administration and finance. The budget also recommends about $286,337 for planning, building, and engineering services, which is $100,000 less than budgeted last year.
Salaries and benefits account for $2.8 million. Services and supplies account for about $1.5 million.
Revenue estimates are largely from taxes and fees, including sales taxes ($1.6 million); property ($973,000); and property taxes in lieu of vehicle license fees ($602,000).
The city also estimated $249,000 will come from franchise fees; $211,000 from services and fees; $171,000 from building permits; and $53,000 from business licenses. Other smaller pots of revenue include income from other agencies ($46,000); interest ($10,000); and building rentals ($4,000).
While the revenue estimates are low, City Manager Jess Cain said it will be at mid-year when the city must pay full attention to the budget, to make sure revenues are as expected or greater than what they anticipate will be spent.
” Mid-year is where the rubber meets the road,” Cain said. ” By then is when we will know what revenue really is.
The current proposed budget assumes some positions that had been budgeted last year will not be filled, including a street, police, and building position. The budget also assumes a 3 percent increase in health, dental, and vision insurance and a $79,839 increase in the unfunded pension liability, Aziz-Khan said.
The most controversial matters discussed at the workshop were the proposed increases in economic development activities, which includes city-sponsored festivals and events, and the citys new expanded recreation department (youth and adult programs).
The budget proposes Economic Development to be funded at $253,000, with $130,000 budgeted for services and supplies, up from $123,000 last year for just the ED staff position, although the city plans to offset some of the expenses with donations.
Cain said funding from grants has not reimbursed the citys cost for the staff position as they had hoped, in part because of delays at the state due to the pandemic.
The city did receive a micro-enterprise grant that, should the city decide to administer it, would pay $77,000 toward staff time; however, that would be divided for his, Aziz-Khans, and ED, Tourism Director Kristy Levings time.
The proposed budget also approves an increase from $30,000 to $61,000 in the recreation department for programs determined by Levings, but without input for spending those funds from the Park, Recreation and Tree Commission, as per the citys statutory requirements.
Aziz-Khan said the city has been getting positive feedback from the public about the new activities, but said the city would need to review what worked and what didnt, so the city could possibly reduce spending.
” People say its great that we are doing this, but I have to say, here is the dollar amount and yes it does cost money,” Aziz Khan said. ” We have to look at ˜Is it benefiting the kids; is it benefiting the public? Lets see in the recreation program which ones we can do again, or what ones we should cut out.
Councilwoman Denise Conrado said recreation programs were needed and are an investment in Colusa.
” We havent had an active recreation department in years and it really has benefited the citizens of Colusa,” Conrado said. ” It is new. There were start-ups and there were variables there, too. It does sound like it costs more. It does show that it costs more than anticipated, but all the programs will be evaluated to see what it did cost and if we want to continue. Its a lot of money but it is an investment in the future of Colusa.
Councilman Greg Ponciano said his concern was not the programs themselves but the large amount of money ($745,000) being invested in the top three administrative departments, while other department budgets remained flat or were reduced.
” It doesnt seem to me the pain is being spread very evenly,” Councilman Greg Ponciano. ” We havent made any improvements or seen any increases in pretty much any department except the city manager, recreation, and economic development.”
Members of the public were mixed on the new activities, which have been billed as economic development, tourism, and community building.
Colusa resident Ben Felt said he understood that people like the events, but had concerns about how much taxpayer funds were used to host large festivals.
” Everyone will show up to a free event,” said Ben Felt. ” They will do that until the city goes broke.
Felt said he would like the city to be transparent about how much it cost to put on the massive country music and other festivals, what revenue came into the city in the form of taxes, or how much revenue was earned by Colusa businesses from the event, such as food purchases and gas.
” With our budget for economic development, I think were going out of pocket way faster than what is coming in,” Felt said. ” You dont know until you start adding up revenue you are really generating from that event – and not just the cost of putting on the event but the cost of having (paid staff) creating all the events.
Longtime Colusa resident Vickie Willoh said she would like people to be more patient to see if it works.
” Having attended these local events, I have numerous friends who have come over from Yuba City,” Willoh said. ” They were really happy. They spent money while they were here. I truly believe this is not going to be money we see right now but we are going to see it in the future when we have a more desirable area and people want to stay here and raise their families here.
Questions at the budget workshop about the actual cost of the festivals, however, were met with silence by staff and members of the council.
Cain said the events are something new the city wants to try to make a positive change in the community, promote tourism, and that ” people” want them.
While the city has not complied with the entire California Public Record request made by the Pioneer Review over 35 days ago, preliminary information received indicates that the Country in Colusa festival expenditures were about $50,000, most of which flowed out of Colusa County. The city spent nearly $10,000 to rent forklifts from a Woodland company, rent furniture (pub stools and cocktail tables) from a Woodland company, rent walkie-talkies from a West Sacramento company, and rent a bike blender from an Oakland company.
Most of the money was spent on the entertainers, with limousine service, out-of-city lodging, and food provided. About $11,000 was spent on out-of-county advertising on Facebook, radio, and the internet.
Local purchases included $1,400 for Roccos banquet room and food; $2,500 to the Tap Room; $1,625 to the Pioneer Review for advertising, $2970 Rough Riderz for t-shirts, and banners, and $202 to Don Habanero for food.
The city reported about $18,000 in ticket sales and upgrades to the VIP room. The city has not released all the information on how much revenue the city took in from food truck, alcohol, and vendor proceeds. They have also not released all the amounts donated by local businesses to pay for the festivals, although an email by Cain obtained by the Pioneer Review with a PR request indicated that $40,000 was given prior to the county music festival and another $40,000 was promised for other events. Most of the business donations ranged from $2,000 to $15,000.
The city has also not fully reported how much was spent in staff time and overtime.
None of the events were discussed by the council prior to the expenditures, nor was there official authorization, which may violate the citys purchasing policy for unbudgeted expenses.
The Watermelon Festival expenses were about $12,000, mostly for entertainment. A city credit card purchase was made at Sav-Mor for $309 in beer and snacks on the Fourth of July, although employee policy prohibits the purchase of alcohol.
Economic development ” infrastructure” includes wine barrels and staging amenities, including picnic tables. A $12,000 purchase to Restaurant Supply for amenities, funded by COVID-19 funds, was charged to the citys credit card, although the purchasing policy allows only ” small purchases.
City officials have indicated that they will have a public ” de-briefing” on the festivals and events when a cost-revenue report is generated, rather than what Cain previously proposed: closed briefings with two council members at a time.
Aziz-Khan said at the budget workshop that she does expects the gap between revenue and shortfall to close by the end of the year. She will also report to the council the 2020-21 ending balance when it is reconciled and closed.
The city currently has about $2.3 million in undesignated reserves, which Aziz-Khan said was healthy. She anticipates a $855,000 balance in the cannabis fund by the end of the budget year.
Cain said at the citys previous workshop that cannabis revenue for the city, which is 3 percent of gross sales, would be higher if marijuana revenues, in general, were higher. In order for that to happen, the cannabis companies need additional avenues statewide to sell their products, he said.
The City Council is expected to see a new ordinance on cannabis in the next few months to decide whether the city should allow for local dispensaries, which would also be an added source of tax revenue.
Aziz-Khan said the city projected a water fund balance of $5.9 million by June 2022 and a $12.7 million sewer fund balance.
The sewer fund contains a capital reserve of $1 million, a collection system reserve of $1.9 million, and a wastewater treatment plant upgrade reserve of $2.8 million. City officials said maintaining high balances in enterprise funds could trigger a requirement to lower customer fees. Meanwhile, the city intends to freeze sewer rates another year as they did in 2020 during the COVID-19 pandemic.
The city anticipates the Pool/Tree/Park Improvement District to have $268,400 in revenue for 2021-22, with $271,012 budgeted as expenditures. The fund also contains the $177,000 Prop 68 allocation for the construction of a splash pad at AB Davison Park. –